EXHIBIT 10(ii)
COMPUTERIZED THERMAL IMAGING, INC.
CONSULTANT STOCK OPTION AGREEMENT
THIS CONSULTANT STOCK OPTION AGREEMENT (this "Agreement") is entered
into on this 18th day November, 1997, and effective January 1, 1997 (the
"Date of Grant") by and between COMPUTERIZED THERMAL IMAGING, INC., a Nevada
corporation (the "Company"), and XXXXX XXXXXX d/b/a MANHATTAN FINANCIAL
GROUP, ("Consultant").
W I T N E S S E T H:
WHEREAS, the Company and Consultant entered into that certain Consulting
Agreement (the "Consulting Agreement") effective January 1, 1997 regarding
the performance by Consultant of consulting services to the Company; and
WHEREAS, the Consulting Agreement provides for the issuance of stock
options to Consultant in consideration for such services; and
WHEREAS, the stock options granted pursuant to this Agreement shall not
be subject to the terms and conditions of the Company's 1997 Stock Option and
Restricted Stock Plan (the "PLAN");
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, the Company hereby grants to Consultant options (the "Options") to
purchase all or any portion of 2,000,000 shares of common stock of the
Company (the "Shares") at a purchase price equal to $0.60 per Share (the
"Exercise Price"), which represents the approximate fair market value of the
Shares on the Date of Grant.
2. AMOUNT AND DATES EXERCISABLE.
(a) The Options may be exercised in whole or in part by Consultant
based on the following schedule: (i) fifty percent (50%) of the Options shall
become exercisable on the Date of Grant; and (ii) the remaining fifty percent
(50%) shall become exercisable on December 31, 1997.
(b) In the event Consultant terminates the Consulting Agreement or
the Company terminates the Consulting Agreement then (i) any Options that are
exercisable as of the date of such termination shall be deemed earned by
Consultant, surviving termination, but in all cases must be exercised on or
before the expiration of three (3) years following the termination date, and
(ii) any Options that are not yet exercisable as of the date of such
termination will terminate automatically without notice and be of no further
force or effect.
(c) Notwithstanding anything in this Agreement to the contrary,
the Options will terminate automatically without notice and be of no further
force or effect to the extent the Options are not yet exercised within five
(5) years after the Date of Grant.
3. EXERCISE OF OPTIONS. The Options may be exercised on one or more
occasions, but can only be exercised for whole Shares. The Options shall be
exercised by Consultant by delivering to the Company (i) written notification
that any or all of the Options are exercisable, including evidence reasonably
satisfactory to the Company to that effect, (ii) the cash required to pay in
full an amount equal to the total Exercise Price for the number of Shares so
exercised. Consultant shall execute such documents and instruments as
requested by counsel of the Company to satisfy securities laws or evidence
the issuance and receipt and performance for the Option Shares, including
acknowledgment of all investor representations deemed necessary by Company
counsel. Upon receipt of all necessary
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documentation and payment, the Company shall deliver to Consultant
certificate(s) for said Shares (collectively, the "Option Shares").
4. TRANSFERABILITY OF OPTIONS. Except as herein set forth, the
Options shall not be transferable by Consultant and shall be exercisable only
by Consultant.
5. REQUIREMENTS OF LAW.
(a) COMPLIANCE WITH LAWS. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be required to sell or issue
any Option Shares under this Agreement if the issuance of such Option Shares
shall constitute a violation by Consultant or the Company of any provisions
of any law or regulation of any governmental authority or the by-laws of the
Company. The Company shall not be obligated to take any affirmative action
other than that which is specifically set forth in this Section 5 in order to
cause the exercise of the Options or the issuance of Option Shares pursuant
hereto to comply with any law or regulation of any governmental authority.
(b) FEDERAL AND STATE SECURITIES LAWS. Upon exercise of the
Options, unless a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), is in effect with respect to the Option
Shares covered hereby, the Company shall not be required to issue such Option
Shares unless the Company has received evidence reasonably satisfactory to it
that such issuance is exempt from registration under the Securities Act and
all applicable state securities laws. The Company shall be obligated to
register the Option Shares, if permitted by applicable state securities laws.
Unless registered or exempt from restriction, the certificate(s) issued
representing the Option Shares shall bear a legend in substantially the
following form:
The Shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under the securities
laws of any state and may not be sold or transferred except upon such
registration or upon receipt by the Company of an opinion of counsel
reasonably satisfactory to the Company that registration is not required
for such sale or transfer.
(c) REGISTRATION RIGHTS. All Shares in the Company which the
Consultant obtains from the exercise of Options will be subject to the
following "piggy-back" registration rights:
If the Company at any time proposes to file, or does file, any registration
statement under the Securities Act, as amended, covering the class of
Shares which Consultant holds, whether that registration is for securities
to be issued by the Company or then held by another party, Consultant will
have the right to have any part or all of the Shares then held to be
registered under such proposed registration statement. If Consultant
wishes to exercise such right, Consultant shall notify the Company in
writing of such desire within thirty (30) days after the date Consultant
receives notice of the proposed registration from the Company. Upon
receipt of Consultant's timely request for registration under this Section
4, the Company will add the Shares Consultant requested be registered to
the proposed registration statement; provided, that if after Consultant
makes a request for registration and the Company decides not to register or
delay such registration, for any reason, the Company will give Consultant
written notice of its decision. However, no such determination will
prejudice Consultant's rights to other and further registrations to be made
by the Company from time to time. The Company will bear all costs and
expenses of each and all such registrations incurred in connection with the
exercise of rights granted under this Section 4.
(d) INVESTMENT INTENT. Consultant hereby represents and warrants
that the Options and Option Shares are being acquired solely for the account
of Consultant for investment purposes only and not with a view to or for the
resale, distribution, subdivision, or fractionalization thereof; Consultant
has no contract, understanding, undertaking, agreement, or arrangement with
any person to sell, transfer or pledge to any person the Options or Option
Shares or any part thereof; Consultant has no present plans to enter into any
such contract, undertaking, agreement or arrangement; Consultant understands
the legal consequences of the foregoing representations and warranties to
mean that Consultant must bear the economic risk of the investment in the
Option Shares for an indefinite period of time; Consultant has such knowledge
and experience in financial and business matters that Consultant is capable
of evaluating the merits and risks of acquiring the Option Shares; and
Consultant acknowledges that the acquisition of
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the Option Shares involves a HIGH degree of risk that may result in the loss
of the total amount of Consultant's investment in the Options and Option
Shares.
(e) DUE DILIGENCE. Consultant acknowledges that it has for a
reasonable amount of time had an opportunity to ask questions and receive
answers concerning the terms and conditions of the issuance of the Options
and Option Shares and the actual and proposed business and affairs of the
Company, and is satisfied with the results thereof, and been given access, if
requested, to all documents with respect to the Company or this transaction,
as well as to such other information that Consultant has requested to
evaluate an investment in the Options and Option Shares.
6. NO RIGHTS AS SHAREHOLDER. Consultant shall have no rights as a
shareholder of the Company with respect to the Option Shares until the date
of issuance of a certificate for such Option Shares; no adjustment for
distributions, or otherwise, shall be made if the record date therefor is
prior to the date of issuance of such certificate.
7. CHANGES IN THE COMPANY'S STRUCTURE.
(a) CHANGES IN STRUCTURE. The existence of the Options shall not
affect in any way the right or power of the Company, directors, or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, or any other security or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business or any other corporate act or proceeding, whether of a similar
character or otherwise.
(b) CHANGES IN NUMBER OF SHARES. If, while the Options are
outstanding, the Company shall effect a subdivision or consolidation of
Shares or other capital readjustment, the payment of a Share dividend, or
other increase or reduction of the number of Shares outstanding, without
receiving compensation therefor in money, services, or property, then (i) in
the event of such an increase in the number of Shares outstanding, the number
of Option Shares then subject to the Options shall be proportionately
increased, and the Exercise Prices shall be proportionately reduced and (ii)
in the event of such a reduction in the number of Shares outstanding, the
number of Option Shares then subject to the Options shall be proportionately
reduced, and the Exercise Prices shall be proportionately increased.
(c) CHANGES IN CORPORATE STRUCTURE. After a merger of one or more
corporations into the Company or after a consolidation of the Company and one
or more corporations in which the Company shall be the surviving corporation,
Consultant shall, at no additional cost, be entitled upon exercise of the
Options to receive (subject to any required action by shareholders) in lieu
of the number of Option Shares as to which the Options shall then be so
exercisable, the number and class of shares or other securities to which
Consultant would have been entitled pursuant to the terms of the agreement of
merger or consolidation if, immediately prior to such merger or
consolidation, Consultant had been the holder of record of a number of Shares
equal to the number of Option Shares as to which the Options shall be so
exercised. In the event the Company agrees to be merged with or consolidated
into one or more corporations or other entities in which the Company shall
not be the surviving entity then, the Company shall, prior to such merger or
consolidation, obtain the full and unconditional agreement of such surviving
entity to assume all of the obligations of the Company under this Agreement.
(d) ISSUANCE OF SHARES. Except as hereinbefore expressly
provided, the issuance by the Company of shares of any class, or securities
convertible into shares of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of rights or warrants
to subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
or price of the Shares then subject to the Options.
8. EXPENSES. Each party shall pay its own expenses, including legal
expenses and attorneys' fees, which have been or may be incurred in
connection with the preparation, administration, amendment, or modification
of this Agreement and the other documents and instruments executed in
connection herewith.
9. NOTICES. Any notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed to have been sufficiently
given if delivered in person, or if sent by certified mail, return receipt
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requested, or telexed or telefaxed to the party entitled thereto with
confirmation of transmission, addressed as set forth on the signature pages
hereto, unless such address is changed by written notice hereunder. If so
mailed the same shall not be deemed effective until three (3) business days
after posting.
10. AMENDMENTS. No amendment, modification or waiver of this Agreement
or any other agreements or documents executed pursuant hereto shall be
effective unless the same is in writing and signed by the person against whom
such amendment is sought to be enforced.
11. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to any
conflicts of laws principles thereof.
12. ALTERNATIVE DISPUTE RESOLUTION. ANY CONTROVERSY OR CLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION, OR VALIDITY
THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH
THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION
("AAA RULES") IN EFFECT AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE
AMERICAN ARBITRATION ASSOCIATION ("AAA") SHALL BE RESPONSIBLE FOR (i)
APPOINTING A SOLE ARBITRATOR, AND (ii) ADMINISTERING THE CASE IN ACCORDANCE
WITH THE AAA RULES. THE SITUS OF THE ARBITRATION SHALL BE HOUSTON, TEXAS.
UPON THE APPLICATION OF EITHER PARTY TO THIS AGREEMENT, AND WHETHER OR NOT AN
ARBITRATION PROCEEDING HAS YET BEEN INITIATED, ALL COURTS HAVING JURISDICTION
HEREBY ARE AUTHORIZED TO: (a) ISSUE AND ENFORCE IN ANY LAWFUL MANNER, SUCH
TEMPORARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS AND OTHER INTERIM
MEASURES OF RELIEF AS MAY BE NECESSARY TO PREVENT HARM TO A PARTIES INTEREST
OR AS OTHERWISE MAY BE APPROPRIATE PENDING THE CONCLUSION OF ARBITRATION
PROCEEDINGS PURSUANT TO THIS AGREEMENT; AND (b) ENTER AND ENFORCE IN ANY
LAWFUL MANNER SUCH JUDGMENTS FOR PERMANENT EQUITABLE RELIEF AS MAY BE
NECESSARY TO PREVENT HARM TO A PARTIES INTEREST OR AS OTHERWISE MAY BE
APPROPRIATE FOLLOWING THE ISSUANCE OF ARBITRAL AWARDS PURSUANT TO THIS
AGREEMENT. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT TO CONSEQUENTIAL, EXEMPLARY,
OR PUNITIVE DAMAGES REGARDLESS OF THE FORUM FOR THE PROCEEDINGS. ANY ORDER
OR JUDGEMENT RENDERED BY THE ARBITRATOR MAY BE ENTERED AND ENFORCED BY ANY
COURT HAVING COMPETENT JURISDICTION.
13. SUBMISSION TO JURISDICTION. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Xxxxxx
County, Texas, as well as of the District Courts of the State of Texas in
Xxxxxx County, Texas over any suit, action or proceeding arising out of or
relating to this Agreement. Each party hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such mediation, arbitration, suit,
action or proceeding brought in any such county and any claim that any such
mediation, arbitration, suit, action or proceeding brought in such county has
been brought in an inconvenient forum.
14. WAIVERS. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce such term, but such waiver
shall be effective only if in a writing signed by the party or parties
against which such waiver is to be asserted. No delay or omission on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege hereunder operate as a waiver of any other
right, power or privilege hereunder nor shall any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.
15. SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be
declared judicially to be invalid, unenforceable or void, such decision will
not have the effect of invalidating or voiding the remainder of this
Agreement or affect the application of such provision to other persons or
circumstances, and the parties agree that the part or parts of this Agreement
so held to be invalid, unenforceable or void will be deemed to have been
stricken herefrom and the remainder of this Agreement will have the same
force and effect as if such part or parts had never been included herein.
Any such finding of invalidity or unenforceability shall not prevent the
enforcement of such provision in any other jurisdiction to the maximum extent
permitted by applicable law.
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16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
COMPANY:
COMPUTERIZED THERMAL IMAGING, INC.
ADDRESS:
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
(000) 000-0000 By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Chief
Executive Officer
CONSULTANT:
MANHATTAN FINANCIAL GROUP
ADDRESS:
0000 Xxxxxxxxx Xxxxxx, #000
Xxxxxxxxx Xxxxx, XX 00000
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
Title:
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